Sales price trade agreements
The primary mechanism for setting an item’s sales price in Dynamics AX is a sales price trade agreement. Sales price trade agreements are always entered for a specific item, and can be set for a specific customer, a group of customers, or all customers. Sales price trade agreements are entered in a specific currency; optionally for a specific configuration/size/colour/site/warehouse; for a specific unit of measure; optionally for a quantity break; and can be for fixed terms (date ranges) or open-ended.
If no active sales price trade agreement is found, the system will use a single field on the item master (the ‘Sales price’). Unlike sales price trade agreements which can be in any currency, the Sales price on the item master is implicitly held in the home currency of the company (e.g. NZD). The item’s Sales price is implicitly in the item’s default sales unit of measure, and doesn’t support quantity breaks or date ranges.
Trade agreements are not to be confused with Sales agreements. A sales agreement is a blanket sales order or contract which typically establishes a favourable sales price for a customer based upon a commitment to purchase a quantity of items within a limited time frame. Individual release sales order are created from a sales agreement. Release sales orders take their sales price from the sales agreement – trade agreements are not used for Release sales orders.
The third way of establishing a sales price in Dynamics AX is to convert a quotation to a sales order. When a sales quotation is confirmed the sales price is taken from the quotation and not from trade agreements or sales agreements.
Sales discount trade agreements
There are three types of sales discount trade agreements:
- Line discounts
- Multi-line discounts
- Total discounts
Line discounts are a single amount or 2 cascading discount percentages, off the loaded sales price for an item or item group (or all items) and for a customer or customer group (or all customers).
Multi-line and total discount types can be applied to a sales order if applicable. These discount types are typically applied if minimum total quantities are ordered.
Trade allowance agreements
Trade allowance agreements are used to manage marketing processes which stimulate demand based upon special pricing and sales incentives (or manage trading terms imposed by your customer). These may include temporary discounts and allowances given off invoice and/or through rebates; and one-off payments (Lump sums) or credits given on single events like radio or web ads, newspaper inserts and end-aisle displays.
A Trade allowance agreement is setup for one or more customers, for one or more items, and optionally tracks the discounts back to individual ‘Funds’. The Trade allowance agreement is defined in a single currency, and is bounded by a date range related to order entry date (or ship date, or receipt date).
A Trade allowance agreement consists of one or more ‘Merchandising events’.
Trade allowance management > Common > Trade allowance agreements:
There are three types of Merchandising events:
- Bill back
- Lump sum
The ‘Amounts’ tab, used to define the discount amount or percentage, differs depending upon the type of Merchandising event.
For ‘Off invoice’ Merchandising events, the Amounts tab simply defines the amount or percentage discount (with an optional quantity break):
For ‘Bill back’ Merchandising events, the Amounts tab allows you to define whether the Rebate is taken from the Gross or Net sales order line price; whether the rebate is paid per invoice (or week/month/year/customised period); how the rebate is to be paid; and the debit and credit accounts used when the rebate is posted. The rebate can be specified in terms of an ‘Amount per unit’, ‘Fixed amount’ or ‘Percentage’:
For ‘Lump sum’ Merchandising events, the Amounts tab simply defines the Lump sum amount and how it is paid:
I’ll work through the process for taking a rebate as a discount in another post.